The College Financial Aid process can be a daunting and time consuming. Many families simply do not have the time to research and execute what this sizable investment will be to their family. From determining the Cost of Attendance to trying to maximize Financial Aid, the steps involved are confusing to a lot of families. Understanding these steps and the Financial Aid formula provides a family with a step in the right direction.
The key to lowering the “cost of college” is to understand how the Financial Aid formula works, why it is important to lower the Expected Family Contribution, and understanding what college’s will provide in Financial Aid.
The following will highlight some of the key areas of the College Financial Aid formula.
Cost of Attendance
When looking at the “cost of college” you need to start with the Cost of Attendance or COA. The Cost of Attendance includes everything from Tuition to Books, Room & Board, Computer, Phone, Internet, Clothes and if you are going out-of-state, then you must also add in Travel costs. And, as everyone knows, the cost of going to college continues to skyrocket.
Expected Family Contribution
Now, given these high costs, most families will apply for Financial Aid to help pay for college. As part of this process, and depending on the school, a number of different Financial Aid forms will need to be filled out. The main financial form is the FAFSA, which is the federal form required by all colleges.
Then, if the school requires it, there are several more Financial Aid forms that need to be filled out including the CSS Profile Form (for private colleges), the Institutional Forms (for elite universities), and, if you own a business or a farm, then there are Supplemental Forms. We know this is a lot, but based upon this information, the schools will come back and tell you how much they expect a family should be able to pay for college. This is called the Expected Family Contribution or EFC. This is the money they expect a family to pay out-of-pocket for college.
Now, once you subtract the Expected Family Contribution from the Cost of Attendance you will arrive at the Family Need (or FN). The Family Need is what the college’s will look at when determining the amount of Financial Aid they will offer a student. Keep in mind that some colleges will meet 100% of a student’s family need, while other colleges will only meet 30% – 50%. It is important to note that the more you can reduce the Expected Family Contribution, the more Financial Aid becomes available!
College Financial Aid
Once all the forms are turned in, then the colleges are able to make a determination on the amount and type of Financial Aid they can offer a student. This Financial Aid can consist of a number of options including grants, loans, work-study programs, and others.
The amount of Financial Aid can vary widely from family to family, depending on a number of factors including how families position their income and assets on the Financial Aid forms. With properly positioned income and assets in a strategic financial plan, a family maybe able to obtain additional College Financial Aid for their child. This in turn, will reduce the overall cost of college for a student.
We hope that the above information has given you a good starting point on understanding the College Financial Aid process. We at The Stedge Group work with families all the time to develop a Strategic Financial Plan for College so that their student can attend their Dream School.
So if you want to learn more, contact us at The Stedge Group.
We offer a Free 1-Hour Consultation for families planning for College! This consultation includes My Tuition Score, which estimates your Expected Family Contribution and Financial Aid Package.
The Stedge Group
Phone: (818) 222-0515